Whether it is “good debt” or “bad debt”, owing a bank money can have some serious effects on you, on a deeper and more personal level than you can probably fathom. You might have had bad debt examples in your family and seen your family members really struggle with it, you might have heard that having debts and credits is a really stressful situation and somehow, it might have been ingrained in you that you should fear that.
Nevertheless, you should know that the average American has about $15,950 debt on his credit card and the average college student starts out in life with about $40,000 in student loans. That might be a quite depressing start if you judge it by the old ways of regarding debt. But what is debt, in the end?
In simple terms, debt enables you to make use of something a lot quicker than if you had to wait to make the money to buy it. It could be a car, a home, furniture or your very own business.
Is Living Debt-Free Smart?
To have a life without debts and credits is possible and you don’t need to be a rich man to do that. Nevertheless, the question is: is it smart? Would you rather wait for 5 years to pay for your college education? Would you rather spend money on car loans while saving money to buy your own car? Is that even wise?
This is where the term “good debt” comes into play. Debt can be good if it can generate long-term benefits or income. Whether it is that you don’t need to pay rent anymore or that your business will flourish using those new machines you’ve bought, these types of debt can be called “good debts” because they bring you long-lasting perks.
How to Deal With Debts and Credit Stress?
Stress over debts and credits does not play well with your overall mental health and it can also have effects on your motivation levels and drive to work. The first thing you need to do here is to establish a clear relationship with that money.
- List all the reasons you’ve had to make that investment
- List all the advantages that that money could bring to you or your business
- List all the possible risks
- See the bigger picture and train yourself to let it go and focus on what you need to make your business and career push forward
The entrepreneurial mind is a muscle that needs training each day, it needs discipline. Having a good debt or credit is also part of that discipline and, in the long-term, it can help your business and career thrive. You also need to see it that way.